Lumbermen To Use Depreciation Savings To lmprove Products And Services

A spokesman for the nation's lumber manufacturers has said the industry will be able to spend an additional $25 million to $28 million annually to improve its products and services, as a result of new depreciation rules and guidelines announced by the Treasury Department in July.

Mortimer B. Doyle, Executive Vice President of the National Lumber Manufacturers Association, predicted that the lumber industry will 'otake advantage of this opportunity, to speed up modernization of plants and equipment, intensify its wood promotion efiorts and strengthen its competitive position for market battles of the coming decade."

Mr. Doyle said the more liberal depreciation allowances will make available an estimated $25 million annually. In addition, he noted that these changes may save lumber firms an additional g2 million to g3 million annually in money that would otherwise have gone for interest payments.

For example, a company borrowing funds, now that depreciation allowances have been increased, could take the cash made available from reduced tax payments and use it for debt retirement or to avoid additional borrowing.

"These developments will enable us to accelerate our continuing program of product improvement, so that our industry can be of greater service in meeting public preference for the products of the forests," Mr. Doyle asserted.

"As a resulto home builders, home buyers, architects, designers and others who influence the purchase of building materials will find lumber and wood products an even better buy-even easier and more desirable to specify and use."

The lumber spokesman said his industry is "gratified by the government's recognition that we deserved more realistic depreciation allowances reflectine the tremendous technological improvemenis instituted to meet market demands," But he added:

"This is only part of what must be done to restore the economic health of our industry and find jobs {or an estimated 250,000 forests products workers now unemployed. Two other steps are also needed.

'oFirst, there must be a complete revision of the policies governing the management and sale of Federal timber, to promote economic stability in the communities dependent upon this source of raw material.

"And, second, the government should impose temporary quotas to curb mounting imports of Canadian softwood lumber, already responsible for taking over 14 per cent of the U. S. softwood market. This quota system would be needed only until U. S. and Canadian producers could sit down together to work out an equitable solution of mutual problems."

The new tax system, effective immediately, allows the entire business community to depreciate equipment, property and ma-

DOUG SAYS i *Pounds orl tons, cartons or kegs, bags or boxes, bundles or bunches, pieces or pallets, rolls or rods, barrels or bales, we haae them all-we keep an orderly warehouse so that all items are aaailable t'or instant deliuery or pickup." Doug Forsyth has twelue years experience with Mason Supplies and has been t'oreman for going on three years.

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chinery much more rapidly than the 20year-old Treasury "Bulletin F." For all industries, the total tax cut is estimated by the T'reasury Department at $1.5 billion the first full year the changes are in effect.

Tax changes applicable to the lumber and wood products industry follow to the letter recommendations made to the Treasury Department earlier this year by a Special Committee on Depreciation Policv of the National Lumber l\llanufacturerc Ar.ociation. Following are highlights of the new regulations as they affect both corporate and'non-corporate firms in the lumber and wood products industry: